DSM set to consolidate in next three years

MOSCOW (MRC) -- DSM is aiming to capture the full potential of its businesses in its near-term strategy, said Feike Sijbesma, CEO of the Netherlands based nutrition and polymer materials group.

In August, the company announced cost reduction programmes in which it aims to achieve EUR250-300m in annual savings by the end of 2018. DSM expects to make 900-1,100 redundancies by rationalising its global support functions, with around half those job losses set to take place in the Netherlands.

Another 100 redundancies in DSM’s nutrition business were announced by DSM on 4 November as part of its Strategy 2018 initiative. Sijbesma said in a conference call about the strategy that DSM had been transformed by acquisitions and disposals over the past five years, but in the three years from 2016 to 2018 it will focus on profit growth and tight capital allocation.

"We do not expect to engage in large acquisitions in the near future as we integrate recent acquisitions," said Sijbesma.

DSM has set two targets in its three-year strategy: an EBITDA annual percentage growth target in the high single-digit area; and annual Return On Capital Employed (ROCE) growth in the high double-digit basis points area.

Geraldine Matchett, CFO at DSM, said in the conference call that the group’s capital expenditure plan is to spend EUR500m-550m per year. This capex will be targeted towards growth areas in its existing businesses, with two-thirds directed to its nutrition business.

DSM announced the strategy at the same time as publishing its third-quarter financial results. Group sales were EUR1.945bn in the third quarter, 8% higher year-on-year, mainly due to a 15% rise in sales in the Nutrition business to EUR1.253bn.

Sales in the Performance Materials business fell by 1% from EUR638m in Q3 2014 to EUR631m in Q3 2015. DSM said this was due to "overall soft volumes" and "lower prices reflecting lower input costs". In this business, sales volumes in the Engineering Plastics segment were "slightly down", said DSM, with weak PA6 polymer sales, but volume growth in compounds and specialty products.

In the results announcement, Feike Sijbesma said: "DSM continued to make good progress in Q3 in both EBITDA and cash generation. These results demonstrate the benefits of our focus on improving our operational performance."

But he added: "It is increasingly difficult to predict macro-economic developments. Assuming no major changes in current market conditions for the remainder of this year, we maintain our full year outlook to deliver an EBITDA in 2015 ahead of 2014, the increase mainly driven by positive foreign exchange effects."

Royal DSM is a global science-based company active in health, nutrition and materials. DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, pharmaceuticals, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials.
MRC

MOSCOW (MRC) -- Versalis (Eni), a major producer in the polymers and elastomers industry, and KBR Inc., a global technology, engineering, procurement and construction company, have announced they have entered a cooperation agreement for KBR to license Versalis' proprietary Ethylbenzene and Styrene Monomer Technologies (EB/SM), said the parent group Eni.

These technologies are used for productions in a large variety of applications including industrial and food packaging, household appliances, building insulation, electronic equipment, car components and toys.

Through this agreement, KBR and Versalis will offer competitive and flexible EthylBenzene and Styrene Monomer production technologies using Versalis' innovative zeolite-based catalysts and expert design capabilities. KBR will provide engineering support to deliver the license packages to clients.

Ethylbenzene is an organic compound used to produce Styrene, the main raw material to produce Styrenic Polymers, and for production of high performance Elastomers. Styrenics are exceptionally versatile plastic materials that are light, durable, highly insulating and provide good mechanical properties.

"This agreement is further proof of Versalis' solid technology background, acknowledged at an international level. The technological cooperation with KBR offers the opportunity to enhance our know-how and the value it brings," said Daniele Ferrari, Versalis CEO.

"This alliance reflects KBR's commitment to our core strengths," said John Derbyshire, KBR President of Technology and Consulting. "This is a great opportunity for KBR to expand our chemicals technology portfolio, providing innovative technologies that give our customers a competitive advantage in today's markets."

As MRC informed earlier, Eni will invest EUR125 million in its Versalis plant in Mantua to under the Group 2014-2017 four-year strategic plan. Versalis is an environmentally and economically sustainable plant which links the industrial areas in Porto Marghera, Ferrara and Ravenna via a pipeline. The planned investment will be used to optimise the plants industrial processes and produce further energy savings. Funds will also be used to expand the Group’s research and development into innovative products and technologies.
MRC

МОSCOW (MRC) -- Evonik Industries has reported a 4% increase in sales in the third quarter, to EUR3.37 billion (USD3.70 billion). Adjusted Ebitda was EUR653 million in the latest quarter, up 31% year-on-year (YOY), remaining at the high level reported in previous quarters,as per companies, press release.

The adjusted Ebitda margin in third-quarter 2015 was 19%. Adjusted net income was EUR296 million in the third quarter, up 36% YOY.

Sales were EUR10.3 billion in the first nine months, 6% higher YOY. Meanwhile, adjusted Ebitda was EUR1.96 billion, up 37% YOY. The adjusted Ebitda margin was 19%, up from 15% in the year-ago period. Adjusted net income rocketed 56% YOY in the first nine months, to reach EUR923 million. Cash flow in the year to date is EUR1.33 billion, "well above the EUR1.07 billion reported for the year 2014 as a whole," Evonik says. The increase has been attributed to continuing good volume trend, partly a result of increased capacity, higher selling prices, slightly lower raw material costs, and currency effects, Evonik says.

Evonik says that, for the third quarter, all three chemical segments report improved earnings YOY for the first time this year.

In the nutrition and care segment, sales were EUR1.24 billion in the third quarter, 22% higher YOY. Adjusted Ebitda increased by 85%, to EUR382 million, a "result of higher selling prices and positive currency effects," Evonik says. Adjusted Ebitda margin rose "significantly," to 31%, compared with 20% a year ago.

The resource efficiency segment reports sales of EUR1.04 billion in the latest quarter, up 2% YOY on slightly higher selling prices and positive currency effects. Adjusted Ebitda rose slightly to EUR216 million, with the adjusted Ebitda margin remaining at the year-ago level of 21%.

Sales for the performance materials business fell 11% YOY, to EUR858 million, in the third quarter, a consequence of plant maintenance in two important businesses and low selling prices impacted by the persistently low oil price. The price effect was more than offset by a temporary margin improvement on the back of lower cost for oil-based feedstocks. As a result, adjusted Ebitda increased to EUR94 million, or 4% YOY, and the adjusted Ebitda margin climbed to 11% versus 9.3% a year ago.

Evonik has confirmed its expectations for the full year. The company has raised its guidance to sales of about EUR13.5 billion versus EUR12.9 billion a year ago and adjusted Ebitda of about EUR2.4 billion compared with EUR1.9 billion in 2014.

As MRC informed previously, in April 2015, Evonik Industries inaugurated a new application technology center for superabsorbent polymers in Krefeld, Germany. The company invested EUR1 million. The new facility strengthens the position of Evonik as an innovative solutions provider for superabsorbent polymers.

Evonik, the creative industrial group from Germany, is one of the world leaders in specialty chemicals. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world.

MRC

MOSCOW (MRC) -- Westlake Chemical Corporation has reported net income for the third quarter of 2015 of USD183.6 million, or USD1.39 per diluted share, on net sales of USD1,188.0 million, as per the company's report.

This represents an increase in net income of USD15.8 million, or USD0.14 per diluted share, compared to the quarter ended September 30, 2014 net income of USD167.8 million, or USD1.25 per diluted share, on net sales of USD1,253.2 million.

Net income for the third quarter of 2015 was impacted by a lower effective tax rate and several plant outages as a result of maintenance turnaround activity.

Net sales for the third quarter of 2015 decreased by USD65.2 million compared to net sales for the third quarter of 2014, mainly due to lower sales prices for all our major products, partially offset by higher sales volumes for most of our major products and sales contributed by our specialty PVC resin business, Vinnolit, which we acquired on July 31, 2014.

Income from operations was USD254.0 million for the third quarter of 2015 as compared to USD306.8 million for the third quarter of 2014. The decrease in income from operations for the third quarter of 2015 was mainly attributable to lower integrated product margins, primarily as a result of lower sales prices in the third quarter of 2015, as compared to the prior-year period, and the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs related to several maintenance turnarounds completed during the third quarter of 2015, partially offset by lower feedstock and energy costs, higher production rates at our Geismar, Louisiana chlor-alkali plant and the contribution from Vinnolit as compared to the third quarter of 2014.

Third quarter 2015 net income of USD183.6 million, or USD1.39 per diluted share, decreased by USD21.5 million from the USD205.1 million, or USD1.54 per diluted share, reported in the second quarter of 2015. Net income for the third quarter of 2015 was impacted by a lower effective tax rate and several plant outages as a result of maintenance turnaround activity.

Net sales in the third quarter of 2015 were USD1,188.0 million compared to net sales of USD1,185.0 million in the second quarter of 2015, an increase of USD3.0 million. The increase in sales was due to higher sales volumes for PVC and styrene, partially offset by lower sales prices for most of our major products and lower sales volumes for polyethylene.

Third quarter 2015 income from operations of USD254.0 million decreased USD41.4 million from the second quarter 2015 income from operations of USD295.4 million. The decrease was due to lower integrated olefins margins, primarily as a result of lower sales prices in the third quarter, and the lost sales, lower production rates, unabsorbed fixed manufacturing costs and other costs related to several maintenance turnarounds completed during the third quarter.

For the nine months ended September 30, 2015, net income was USD535.0 million, or USD4.02 per diluted share, on net sales of USD3,476.6 million. This represents an increase in net income of USD39.8 million, or USD0.33 per diluted share, from the nine months ended September 30, 2014 net income of USD495.2 million, or USD3.69 per diluted share, on net sales of USD3,279.5 million. Sales prices in the first nine months of 2015 were negatively impacted by the significant decline in crude oil prices.

As MRC informed previously, in December 2014, Technip was awarded a contract by Westlake Chemical to provide detailed engineering and procurement services to expand the recovery section of Westlake’s Petro 1 ethylene plant at its complex in Sulphur, Louisiana,

Westlake Chemical Corporation is a U.S. manufacturer and supplier of petrochemicals and polymers, headquartered in Houston, Texas. The range of company's products includes ethylene, polyethylene, styrene, propylene, caustics, polyvinyl chloride and plastic products. Westlake is one of the major ethylene producers in the US and its Calvert City operation is a large integrated PVC site.
MRC

MOSCOW (MRC) -- The Board of Directors of Westlake Chemical Partners GP LLC, the general partner of Westlake Chemical Partners LP, a Westlake company has declared a distribution of USD0.2994 per unit representing a 2.89% increase from the second quarter distribution, as per the company's press release.

This is the fifth distribution announced by the Partnership since its successful IPO closing on August 4, 2014. The distribution will be payable on November 27, 2015, to unit holders of record on November 9, 2015.

As MRC wrote before, in May 2014, Westlake Chemical Corp., the US plastics maker controlled by the billionaire Chao family, separated its ethylene assets into a tax-advantaged venture in which it planned to sell shares to the public. The master-limited partnership (MLP) includes three US ethylene plants and a 200-mile (322-km) ethylene pipeline.

Ethylene, the most common petrochemical, is used to make products from plastic bottles to autoparts and pipe.

Westlake Chemical Corporation is a manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. The company's range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC building products including pipe and specialty components, windows and fence.
MRC